Points of View

ICYMI: In-Store Retail Experiences Are Back in Fashion

May 31, 2016 Melissa O'Brien

In a consumer world where customer experience is the biggest differentiator for products and services, the retail industry can’t wait to experiment. It is apparent that people, particularly younger generations, are increasingly interested in spending on experiences more than on material items. Just as the changing dynamics of contact center channels morph the role of the agent but don’t displace it, the rise in online shopping doesn’t replace the store. Rather it changes the role it plays and the expectations for consumer experience. A seemingly counterintuitive trend is taking shape in the retail sector.


Amid generally abysmal earnings, bankruptcy announcements and rampant store closures even among retail staples like Sports Authority and Aeropostale, many retailers are doubling down on the in-store experience, playing on a paradoxical trend that assumes that people still value them.


Apple was the first to crack the nut on a store that offered a different kind of experience, where customers are encouraged to interact with the products, which Microsoft quickly mimicked. Recent examples of this trend include Samsung, which has opened a flagship store in Manhattan featuring a demo kitchen where customers can try out virtual reality headsets and test products (but can’t actually purchase anything). Other examples include fashion retailers like Lululemon combining retail shops with yoga/fitness studios and Target’s IoT focused store where customers can demo connected home products. Many stores are betting on drawing customers with a value proposition that they definitely can’t get online, such as revitalizing in-store restaurants. Even companies struggling with in store performance are looking to strike a balance on physical stores, such as Finish Line which is planning store remodels that delight the customer through brand storytellingall while closing 600 stores. This is a kind of quality over quantity approach that could fare well for many retailers looking to optimize their omnichannel strategy.


Despite the “Amazonization” of retail, brick and mortar sales still totally dominate the retail market in terms of sales, however, customer expectations have set the bar higher for what an in-store experience should be. Online shoppers, especially digital natives, are used to getting personalized offers, extensive choices and the ability to provide feedback on products and services—to some degree, these expectations carry over into the physical store experience. Customers have come to expect an alignment between the brick and mortar and online experience as well as the personalization they are used to from ecommerce. Having accessible, knowledgeable staff equipped with mobile devices for easy information access and checkout capabilities are essential to make these experiences work and not backfire. For consumer electronics manufacturers, digital merchandizing on the devices in store is becoming table stakes.


To pull all this together in aligning physical store and ecommerce experiences, retailers need not only integration from an inventory management standpoint but also elements that affect customers that services support can address, such as cross-channel pricing and promotion and merchandizing opportunities. Predictive analytics can help manage the supply chain and inventory more efficiently. The next generation of in-store experience will also leverage IoTthings like digital signage, beacons, and RFID will help collect and analyze data which will need to be analyzed in order to create greater levels of personalization.


This puts the BPO industry in an interesting spotat the most basic level for those retailers struggling financially, BPO could be an appealing cost cutting strategy, but the potential for bridging the gap between online and in-store and generating better customer experience is the crux of the opportunity for service providers. While more retailers are taking bets on in-store experiences to create visceral, “wow” moments for their customers, this just creates yet another channel that needs to feed into the big picturehow do traditional stores, flagship “digital” stores, digital media and online properties all complement each other and contribute towards creating consistent brand experiences? Retailers need help pulling together the consistency of pricing and offers as well as a consistent brand experience. Cost might be a driver for BPO, but the real value proposition is in solving this growing problemand helping to create an experience for the customer that promotes loyalty and advocacy with the brand.